FCC, FTC chairmen warn telecom marketers

Published on November 05, 1999.

In unusually blunt language, the chairmen of the Federal Communications Communication and the Federal Trade Commission accused long-distance and dial-around telephone marketers of using their ads to deceive consumers and warned of major enforcement actions unless changes are made quickly.

At a Nov. 4 Washington workshop, the two said past reluctance by the FCC and FTC to bring enforcement actions against long-distance company ads is over, and ads for dial-around and long-distance services that list low per-minute rates without clearly stating major conditions will undergo major scrutiny.

"Consumers are bombarded with TV ads promising big savings that all too often don't disclose everything they need," said FCC Chairman Bill Kennard, citing a massive rise in consumer complaints about long-distance and dial-around services. "We will take action."

FTC Chairman Robert Pitofsky said ads have made "a barrage of claims with hard-to-compare terms of service . . . [with disclosures that] fall short of what is necessary for consumers. I have the feeling that the companies think it is a free-fire zone and no one is watching. This is not true."

While acknowledging the FCC is already investigating at least one case, FCC and FTC officials said they are hopeful the industry will act quickly to voluntarily change ads and avert legal action.